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Here’s a change: Applications for home-purchase loans rise

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Mortgage rates remained near record lows this week, Freddie Mac said in its weekly survey, and a different kind of interest -- among people seeking loans to buy houses -- perked up for the first time in a month.

Freddie Mac said lenders were offering an average rate of 4.75% to rock-solid borrowers for a 30-year fixed mortgage, up from 4.72% a week earlier. For 15-year fixed loans, the average was 4.20%, up from 4.17%. The borrowers would have paid 0.7% of the loan amount in upfront lender fees and points, Freddie Mac said.

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Despite the eye-poppingly low rates, home purchase applications had shriveled after the expiration of a deadline for federal home-buyer tax credits at the end of April. That prompted a debate about whether a housing recovery is sustainable as emergency government-support plans run out.

This week’s Mortgage Bankers Assn. report on borrowers seeking loans showed purchase applications up a seasonally adjusted 7.3% to accompany a continuing boom in refinances. But an analyst for the trade group avoided generalizing from just one solid week.

“While it is clear that purchase applications in May dropped sharply as a result of the tax-credit-induced increase in applications in April, it is unclear whether we are seeing the beginnings of a rebound now,” said Michael Fratantoni, the association’s vice president of research and economics.

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-- E. Scott Reckard

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